GBP/USD. Analysis for June 12. The British pound continues to confuse the wave pattern
June 12, 2023 5:20 pm
The wave analysis for the GBP/USD pair still needs to be simplified and clarified. After a horizontal corrective phase, I was expecting a similar downward movement. Still, the increase in quotes over the past two weeks suggests that the market is ready to build a full-fledged upward trend segment. The presumed wave 2 or b could have completed its formation last week. If that is the case, the formation of an ascending wave 3 or c has started, giving the British pound an excellent opportunity to rise to the 26th–30th figures. It is up to you to decide how justified this is based on the current news background. There is also a possibility that wave 2 or b may have a clear three- or five-wave structure. In that case, the recent increase in quotes could be interpreted as an internal corrective wave within wave 2 or b.
The wave analysis for the EUR/USD pair fundamentally differs from that of the GBP/USD pair. For the euro currency, the expectation is the formation of a downward set of waves, while the hypothetical complication of the upward trend segment is not currently on the agenda. However, for the British pound, it is either a new upward trend segment or a too complex downward one. The news background for the British pound has remained virtually unchanged recently, so the increase in demand for the pound seems ambiguous.
Monday is a challenging day. The GBP/USD pair rate decreased by 70 basis points on Monday. However, the British pound experienced increased demand last week without apparent reason. The recent increase over the past 2-3 weeks complicates the current wave analysis, confuses the wave pattern, and does not align with the news background. The decrease in the British pound on Monday compensates for its earlier rise. But more is needed to make the movements themselves more logical and consistent.
The most interesting events in the market will begin tomorrow. Important unemployment reports will be released in the UK, and inflation data in the US. As I mentioned, the British pound is moving according to its own rules, so the news background may only impact market sentiment. The overall news background does not suggest a strong increase in the British pound, considering that it has already risen by nearly 2500 basis points over the past year. There is a higher probability of a complex downward wave 2 or b than the formation of a new upward wave 3 or c. Wave 3 should be present according to the current analysis, but only after a deep second wave.
General conclusions.
The wave pattern for the GBP/USD pair still suggests the formation of a downward wave. Wave b could be very deep since all recent waves have been roughly equal. However, the recent increase indicates a possible completion of this wave on May 25. In that case, the trend segment may transform into a full-fledged upward one, presenting a completely different wave pattern and recommendations. Therefore, at this time, I recommend selling the British pound with targets around the 23rd and 22nd figures, but signals for the resumption of the downward wave formation are needed. I approach further increases in the pair with caution.
On a larger wave scale, the pattern is similar to the EUR/USD pair, but some differences remain. The downward corrective phase of the trend is complete, but the formation of a downward wave is still ongoing. This wave could be deep and prolonged, and the entire trend segment may be horizontal, similar to the previous one.
The material has been provided by InstaForex Company – www.instaforex.com
The wave analysis for the GBP/USD pair still needs to be simplified and clarified. After a horizontal corrective phase, I was expecting a similar downward movement. Still, the increase in quotes over the past two weeks suggests that the market is ready to build a full-fledged upward trend segment. The presumed wave 2 or b could have completed its formation last week. If that is the case, the formation of an ascending wave 3 or c has started, giving the British pound an excellent opportunity to rise to the 26th–30th figures. It is up to you to decide how justified this is based on the current news background. There is also a possibility that wave 2 or b may have a clear three- or five-wave structure. In that case, the recent increase in quotes could be interpreted as an internal corrective wave within wave 2 or b.
The wave analysis for the EUR/USD pair fundamentally differs from that of the GBP/USD pair. For the euro currency, the expectation is the formation of a downward set of waves, while the hypothetical complication of the upward trend segment is not currently on the agenda. However, for the British pound, it is either a new upward trend segment or a too complex downward one. The news background for the British pound has remained virtually unchanged recently, so the increase in demand for the pound seems ambiguous.
Monday is a challenging day. The GBP/USD pair rate decreased by 70 basis points on Monday. However, the British pound experienced increased demand last week without apparent reason. The recent increase over the past 2-3 weeks complicates the current wave analysis, confuses the wave pattern, and does not align with the news background. The decrease in the British pound on Monday compensates for its earlier rise. But more is needed to make the movements themselves more logical and consistent.
The most interesting events in the market will begin tomorrow. Important unemployment reports will be released in the UK, and inflation data in the US. As I mentioned, the British pound is moving according to its own rules, so the news background may only impact market sentiment. The overall news background does not suggest a strong increase in the British pound, considering that it has already risen by nearly 2500 basis points over the past year. There is a higher probability of a complex downward wave 2 or b than the formation of a new upward wave 3 or c. Wave 3 should be present according to the current analysis, but only after a deep second wave.
General conclusions.
The wave pattern for the GBP/USD pair still suggests the formation of a downward wave. Wave b could be very deep since all recent waves have been roughly equal. However, the recent increase indicates a possible completion of this wave on May 25. In that case, the trend segment may transform into a full-fledged upward one, presenting a completely different wave pattern and recommendations. Therefore, at this time, I recommend selling the British pound with targets around the 23rd and 22nd figures, but signals for the resumption of the downward wave formation are needed. I approach further increases in the pair with caution.
On a larger wave scale, the pattern is similar to the EUR/USD pair, but some differences remain. The downward corrective phase of the trend is complete, but the formation of a downward wave is still ongoing. This wave could be deep and prolonged, and the entire trend segment may be horizontal, similar to the previous one.
The material has been provided by InstaForex Company – www.instaforex.com
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